9:08AM - Does Gnarls Barkley do a cover of The Smiths's Stop Me If You've Heard This One Before? Because that's what it sounds like. We've been told by the RCRD LBL-master that it's Mark Ronson. Playing Feist from the iPod nano commercial now.

9:13am - Lights dimming, cheers coming up, music fading. Here we go!

9:15am - It's a a Mac / PC commercial. "Happy New Year! -- It's a terrible year. 2008 is the year of the PC -- I'm going to copy everything you did in 2007!"

9:15am - Steve! Huge cheers.

9:15am - Welcome to Macworld 2008! There is clearly something in the air today. Before we dive into all that, I just wanted to take a moment to look back to 2007. 2007 was an extraordinary year for Apple. The amazing new iMac, awesome new iPods, and the revolutionary new iPhone.

9:16am - It was an extraordinary year for Apple, I want to take a moment and say thank you. Thank you, for an extraordinary 2007. Huge applause. I've got four things I'd like to talk about today. The first one: Leopard. I'm thrilled to report that we have delivered over 5 million copies of Leopard in the first 3 months. It's the most successful release of OS X EVER. Almost 20% of the OS X install base has upgraded. Unprecedented. We're really thrilled by this.

9:18am - "One of the things being announced today, Microsoft is now shipping Office Mac 2008 -- this is the last big app to go native on Intel. We're finally there, all the big apps are native on Intel. Thank you. Adobe, thank you, Microsoft, thank you. ... he's going over Time Machine, back ups.

"Today we're introducing a companion product to Time Machine -- it's called Time Capsule."

"It's really clever, it's a backup appliance. What it has in it is an Airport Extreme base station and a hard drive -- 802.11n wireless and a server grade hard drive in it."

9:18AM - "These two things together make up Time Capsule -- really nice. You can back up your notebook wirelessly to TC. You can backup ALL the Macs in your house wirelessly to one Time Capsule. It's really wonderful. We're gonna sell it in two versions."

"One with a 500GB drive, one with a 1TB drive inside it -- $299, and $499. Very aggressive prices because we want people backing up! Ships in Feb." Mild applause.

"We've got an ad for Time Machine -- I'd love to run it now." This is the ad released last week.

9:22am - "So that's TC, a perfect companion to Leopard, and that's the first thing." Applause. Number two! "It's about the iPhone." A hush...

"I've got some great news. Today happens to be exactly the 200th day since the iPhone went on sale. It's been shipping exactly 200 days. I'm extraordinarily pleased to report that we've sold 4m to date." Daaamn, Steve! Applause. "That's 20k iPhones per day, on avg. We're really pleased with this."

Palm, Moto, Nokia together -- "We equaled all them in the first 90 days..."

9:24am - "This is our first 90 days, 4m iPhones to date." Big applause. Steve's obviously looking pretty happy up there. "What everyone's excited about is the SDK we're releasing in late Feb... a chance to write incredible apps on the iPhone. We wanted to give everyone something today, too."

"We've got some great new features today. First: maps with location!"

"You know have the ability to find your current location in maps. Webclips, right on the home screen. Up to 9 total home screen. SMS multiple people at once." Big applause on that one.

"Chapters, subs, langs in videos, lyrics in iPod." Demo time!

9:26am - Maps demo now -- page curls up, search and directions buttons now -- if you've seen the 1.1.3 demo vids, this is exactly it. "Schoom. And there we are." as it locates Steve in the Moscone. "I can flip right into directions, and it uses my current location to start..." calcing the route back to Apple HQ.

9:28am - "We love working with Google. So... I want to SMS more than one person at once!" Let's bring up a new message here. I want to send it to Phil and Scott, maybe Tim..." they're all coming up, just like an email to multiple people. Friggin finally. Still no sign of MMS, though.

9:29am - The list shows an icon to the group -- "It's pretty nice. So that's sending SMSs to multiple people. Webclips! I'm gonna go to Google because they have really cool apps that work with the iPhone -- now I have a plus button and I can just push this and I can just hit add to home screen."

9:30am - I want to customize my home screen -- I can touch any icon for a couple seconds, and they start to shake!" Chuckles. "They start to get restless!" Icons move around, new pages, dots on the bottom just like the Summerboard hack.

9:31am - "I can create up to 9 home screens, and I can move between them with the flick of my finger. So how do we do some of this stuff? Let's take maps... how do we do that? Well, we're working with two companies. Google, and Skyhook wireless -- we've driven the US and Canada and mapped WiFi hotspots, they have 23m hotspots in their database."

9:33am - "They pick up beacons, triangulate the beacons, and tell you where you are -- and Google is doing the same thing triangulating cell towers -- we're using both of them, and it works pretty doggone well. We have this new add to home screen button... add our apps right to the home screen."

Demoing lyrics, chapters, languages, all the new multimedia features on the iPhone. "All of this is vailable today as a free software update for every iPhone." Big applause. v1.1.3!

9:34am - "The iPhone isn't standing still, we keep making it better and better. That's the iPhone. But what about hte iPod touch. What can we do for the touch? We decided to add five apps to the touch. Mail, maps, stocks, notes, and weather!" [About freaking time! - Peter]

9:35am - "All the same stuff we just heard about on the iPhone -- on the iPod touch. Starting today we're going to build it into every new iPod touch, for existing iPod touch users it's going to be just a $20 upgrade." EXCUSE me?! You have to PAY for this? This is SO weak.

"iPod touch, and the iPhone -- major software updates. And that's the second thing I want to talk about." Big applause.

9:36am - "Ok, number three. This is a good one, too. Number three is about iTunes."

"I'm really pleased to report that last week we sold our 4 billionth song. 4 billion songs. On Christmas day we set a new record -- 20m songs in one day. Isn't that amazing? That's our new one day record. We've also sold 125m TV shows -- that's WAY more than everyone else put together."

9:37am - "And we've sold 7m movies, again, more than everyone else put together. But it didn't meet our expectations, I have to tell you. We think there's a better way to deliver movie content through iTunes. So today, we're introducing iTunes Movie Rentals."

9:38am - "We've never offered a rental model in music because we don't think people don't want to rent music. But your favorite movie -- most of us watch once, and renting is a great way to do it. It's a great way to do it. We've got participation of great studios. Touchstone, MGM, Miramax,... and these six too. Lions Gate, Fox, WB, Walt Disney, Paramount, Universal, Sony..." Everyone! Huge applause

9:39am - "We're gonna have all the great first run films -- REALLY, really great films. I'm sure you saw a lot of these in the theater. We've also got great library titles, Red October, Matrix... lots of library titles, all the great new ones from this last year..."

9:40am - "Now, so what's the deal? We're gonna launch with 1k films by the end of February -- 30 days after DVD release. Watch anywhere, PCs, Macs, iPods, iPhone..."

9:41am - "Watch instantly! In less than 30s..." it streams. "The rules -- you have 30 days to start watching it, and once you start you have 24 hours to watch and finish it. As many times as you want. You can transfer films to another device in the middle -- transfer to your iPod and watch the rest on the iPod on your flight."

"What's it going to cost? To rent a library title will cost $2.99 -- new release? $3.99" Big applause.

9:42am - "Here's how it works -- I'm on iTunes, looking at a movie I want to rent, I hit rent movie, and it adds to my rented movies category in my iTunes library...." Sorry for the technical difficulties everyone! We're at 10x the traffic of our last keynote, but things are coming back online.

9:43am - "It launches today! Free software update for iTunes, iPods, iPhones to support rentals. Rolling it out in the US today, we're dying to get this out internationally. But what about this? What about the flat screen TV? I'd like to watch the movies there too."

9:44am - "I'd like to say all of us have tried. We have, MSFT, Amazon, TiVo, VuDu, Netflix, Blockbuster -- we've all tried to figure out how to get movies over the net onto the TV. We've ALL missed. No one's succeeded yet. We tried with Apple TV -- it was designed to be an accessory for iTunes and your computer. But that's not what people wanted."

"We learned what people wanted was about movies. Movies. Movies. We weren't delivering that -- we're back with Apple TV Take 2 -- It still syncs to your computer, but no computer is required

9:45am - Here's what you can do with Apple TV: rent movies directly on widescreen TV with Apple TV. Rent them in DVD quality, rent them in HD with 5.1" HUGE applause! Screaming.

"Dolby 5.1 surround. The quality is unbelievable. You can also view audio and video podcasts right on ATV, choose from 125k podcasts and see them right on your widescreen. Get photos from your computer... get them also right over the internet from Flickr and .mac." Flickr support, good gawd yall.

"And, of course, YouTube -- we've expanded the selection. There's now over 50m videos from YT, This has worked out so great, our customers love this. Buy TV shows and music right from your TV. And if you're using a computer it'll sync BACK to your computer."

9:46am - "And, of course, play iTunes content. So all of this stuff on the new Apple TV. Let me focus on the HD movies for a minute... the library titles are $2.99 and $3.99 -- for just a dollar more rent them in HD, $3.99 and $4.99 -- there are over 100 titles available today.

9:47am - "All these features and an entirely new UI." Demo time! "This is the new UI -- one menu, it couldn't be simpler. Let's go into movies..." Man, this is a sexy interface, no doubt.

9:48am - Star Trek! I love the old Star Trek movies..." Chuckles. Blades of Glory: "Fun movie -- I can read about the movie, see the actors, directors..." shows recommendations based on what others have viewed.

9:49am - "So you get the idea..." He's renting the movie, downloading, "it'll tell me when it's ready to play. So I hit the play button and it'll play!" Looks pretty friggin good, even on this absolutely massive screen.

9:50am -This is full DVD quality -- it's great. Now I'm gonna play some HD." And, of course, it looks marginally better, as HD should. Live Free or Die Hard. Where's Justin Long at?

9:52am - "Let's go to genres... G, PG, romance, sci-fi, western... I just want to go ahead and show you search. We're just populating the database, ingesting these movies from the studio and encoding them right now. I want to find Shakespeare in Love, really fast search... and there it is. It's that simple. So now let me go back up... we have over 600 TV shows you can buy for $1.99."

9:54am - "Music: again, we've got 6m songs in iTunes, you can buy any of them on your widescreen TV, lets go ahead and search for something here... there they are right there, and there's the music video. Let's go to podcasts here, this is really cool. HD podcasts! We have a lot in HD now, which is really amazing." Veronica Belmont was on screen!

9:55am - "This is streaming off the server -- this is free." Skiing video with totally rawkin music. Stoooooked dude.

9:56am - "Incredible!! Let me go to photos now, don't know if I can top that one -- again, this is all live. Set these things up as screen savers, or just look at the photos. So let's go to the vacation here... streaming off .Mac, live."

9:58am - "Let me go to Flickr now -- this is Flickr live, right from their servers. I can show you all the photos, but I can do something even more fun, I can see not only their photos, but their friends' photos!" [Can't we just hurry up and get to the new laptop? - Peter]

10:01am - "So this is where we're at with Apple TV. I think it's a revolution. Certainly we've made some progress since our first try. Apple TV -- this is a new, free software upgrade. We want EVERYONE to have this new software."

"This is a free upgrade to every ATV owner. Given the fact that we have all new software and we've got the support from EVERY major studio. We want to make it even more accessible. Right now it sells for $299 -- but not anymore."

"The new price of ATV is just $229."

10:02am - "We are shipping the free software upgrade to existing owners and the new $229 ATV in just two weeks." Mild applause.

"Let's come back to iTunes rentals, you can watch them on your computer, watch them on all current gen iPods, your iPhone, and you can watch them on your widescreen TV. Order them for your computer, iPods, iPhone -- right off of iTunes. Order them for your widescreen TV right ON your widescreen TV. We've got support from EVERY major studio. We've got it all together."

"The first studio to sign up with us... 20th Century Fox. We appreciate that, we've developed a great working relationship. Let me introduce to you Jim Gianopulos, chairman and CEO of Fox." Big applause.

10:04am - He's talking about he's getting excited just hearing Steve talk about this stuff, but he already knows. Well, you know, Macworld's an exciting event. Jim: "Make great movies, give it to people in as many was as you possibly can. When you talk to people about what they want, it's the same thing: variety of choice, easy access, convenience, control over how they watch it, and portability." Sure, so why the DRM.

"Basic enough that even a studio guy can understand it. So we go to our in-house tech dept and I think we have a slide with the result -- woohoo!" Homer's on screen in a faux-iPod ad.

10:06am - "The real back story, when Steve came to us, it was a no-brainer. It was the most exciting, coolest thing we've ever heard. VoD isn't a new thing. But there was music, and then the iPod. There was a phone, then the iPhone. Apple does things in an intuitive, insightful way... this will be a transformative version of the rental model. We're incredibly excited about it."

"There's another idea we've been talking to Steve about. There are other formats -- DVD. And there are next gen formats, like Blu-ray." Laughter and applause. "People still want to buy hard media, but we don't want to deny them the benefit of watching the same movie. So we developed a digital copy that will be on discs going forward."

10:07am - "I have a copy of the first one today. We planned this date a long time ago, The Family Guy Blue Harvest video, but this contains a digital copy that you can instantly move to iTunes."

10:08am - "We're really excited about this as well, today is an exciting beginning for movie rentals on iTunes. We couldn't be happier and prouder of our partnership. Thank you." Jim's off, Steve's back.

"Thank you Jim. Well, iTunes movie rentals. That's the third thing we wanted to talk about today."

"What is it? Well, as you know, Apple makes the best notebooks on the planet. The MacBook and the MacBook Pro."

"These are the industry standards. Today we're introducing a third -- The MacBook Air."

"What is the MacBook Air? In a sentence, it's the world's thinnest notebook."

10:09am - "What's that mean? Well, we went out and looked at all the thin notebooks -- most people think of the Sony TZ. They're thin. We looked at ALL of them, tried to distill the best of breed. They generally weigh 3 pounds, about 0.8-1.2-inchs thin, wedge shaped, they compromise to get the weight down. Things like the display.

10:10am - an 11 or 12-inch display, they also compromise on the keyboard, they make mini keyboards. They don't run the mas fast as they could. We looked at this and said what do we like? Where can we compromise? The weight's a good target, 3 pounds. But too much compromise to get there.

Less than a full size display, keyboard, and we want to put even more performance in this product. This is that Sony product -- one of the best in the field. This is the macbook Air. 0.76 - 0.16-inches

10:11am - Unprecedented 0.16-inches -- the thickest part of the Air is still thinner than the thinnest part of the TZ series. It's so thin it fits in a manilla envelope. Let me show it to you now.

He pulls out a manilla envelope. Huge applause.

10:12am - "This is the new Macbook Air, you can get a feel for how thin it is. There it is." Unreal, that's almost invisible from the side.

10:14am - "The display is gorgeous -- LED-backlit display, it says power, and instant on the minute you open it. It's got iSight for videoconferencing right out of the box. Flip it down, there's a full-size keyboard. This is the best notebook keyboard we've ever shipped, and it's full-sized. And it's backlit."

10:15am - We've got a very generous trackpad, which is great. We've also built in multi-touch gesture support. We've taken that even further, you'll actually be able to turn on all sorts of new gestures."

"You can double-tap and move the whole window, not just the cursor. When you're in a large photo you can pan around with two fingers. When you want to rotate a photo, just rotate your fingers. We learned in the iPhone and we're putting it in our notebook computers."

"If you want to go between photos, pan right, pan left -- if you want to zoom, pinch in and out. Isn't that great?" Rumbling applause.

10:16am - Pretty amazing. Again, you can see how beautiful and thin this product is. Now, how did we fit a Mac in here? I'm still stunned our engineering team can pull this off. There's three things in here -- battery, hard disk, and electronics. We went to a 1.8-inch hard drive." Same as in iPods. "Ships with 80GB drive, option of 64GB SSD."

10:17am - "They're a little pricey, but they ARE fast. But the real magic is in the electronics, this is a complete mac on this board. What's so special about that? This is how big it is." It's the size of a pencil. "We didn't compromise on performance. It uses the Core 2 Duo, this is a really speedy processor."

10:18am - "We've got a great relationship with Intel -- they're engineering driven, we challenge each other. We said we want the Core 2 Duo, but we need to go to smaller packaging. It sounds easy -- it's not. They invested a lot of engineering to create this for us. The same chip in a package that's 60% smaller -- one of the reasons we can build the MacBook Air. I'd like to say thank you, Intel."

10:19am - "I'd like to invite Otellini on stage..." Paul O gets up there, another appearance. Paul: "About a year ago you challenged us to get the world's best CPU into this machine. When we started this project we didn't think it was possible. What we built for you is the width of a dime, thick as a nickel... it's been a challenge, we sweated over it, and we did what we do best together. Innovate."

Paul gives Steve the chip as a "souvenir." Aw, shucks.

10:20am - "This is AWESOME technology. Thank you Paul, thank you Intel. So that's the electronics -- how we fit a Mac inside the world's thinnest notebook. On one side we have MagSafe -- a smaller 45w power adapter, on the other side we have a door that exposes a USB 2.0 port, Micro-DVI, and a headphone jack."

"And, maybe most importantly, we've built into the most advance wireless... 802.11n, along with Bluetooth 2.1 + EDR. The latest and greatest in wireless, built to be a wireless machine."

10:21am - "What you're NOT going to find is an optical drive. You can buy this accessory, it's USB powered, it costs just $99, it's very compact. But you know what? We don't think most users will miss the optical drive, or will need the optical drive."

10:22am - What do we normally do with these drives? Play movies, install software, burn CDs... guess what, we have a much better way. We can wirelessly rent movies, we have a much better way than burning CDs -- most of us have iPods in our car. For making backups we have Time Machine and Time Capsule to wirelessly back up our laptops. What about installing software?"

"We're going to do that wirelessly too. We have a new feature built into the MBA called remote disc."

"You'll see in the finder called Remote Disc -- it will show you all the Macs and PCs that have some special software on them, and you can pick one of those machines and ask to borrow its optical drive.

10:23am - "Once they've accepted your request you can see what's on their optical drive -- a PC can read a Mac disc and send it wirelessly over to your MBA and it's just as if you had a local optical drive. It's amazing" Big applause. Well, we'll be damned.

"All these and more in the thinnest notebook in the world -- we are pricing this at $1799."

"Lots of woos, huge applause. We commence shipping MBAs in just TWO weeks. Pre-order today, we're shipping in two weeks."

"The thinnest notebook in the world -- we made an ad. Run the ad!"

10:29am - "It's 2008 already! In the first 2 weeks, let's just review the new products and innovations. Last week we announced the most powerful Mac we've ever made. 8 CPUs, it's a SCREAMER. Today: Time Capsule."

"There's a few things we've done on the environmental side. It's enclosed in a fully aluminum case -- it's easily recycled, highly desirable by recyclers. It's our first mercury and arsenic-free display. All of the circuit boards are bromide and PVC free. We're very happy about that as well... the retail packaging is 50% less volume, this helps a great deal in energy expended in transporting and disposing the materials."

We're very conscious of this. Thank you. The thinnest notebook in the world. And it joins the other two great notebook families -- the MB and the MBP, the best notebook in the industry. And that's the fourth thing I wanted to talk to you about today."

10:30am - "Software upgrades for the iPhone and the iPod touch -- bundling 5 new apps on the touch as well. iTunes movie rentals, a whole new way to enjoy rentals on your computer... and a completely reinvented Apple TV where you can order movies right on your widescreen. Unbelievable."

"AND, the MacBook Air -- all this in the FIRST two weeks. And we've got 50 more weeks to go!" Big applause. Oh Steve, you kill us.

"This, ladies and gentlemen is what we have to share today, thank you SO much for coming. We have a special treat today."

10:31am - "I wanted someone who could help us bridge the gap between iTunes movie rentals and our relationships with movies and music -- one of our heritages now. The best person in the world to do that was gracious enough to come and do a few songs for us. Randy Newman."

10:33am - Randy: "I was in Europe a year ago, and I noticed they didn't like us very much... I wanted to do something to sum up America in 2:27." Laughter. "I'd like to say a few words in defense of our country... the people aren't bad!"

10:37am - Randy's finished his first song. "Goodbye... goodbye... In many ways, that was about the toughest act to follow of ANY act. This was hard, it's not Rockefeller or Carnegie, I mean, you can tell when someone's a human being."

"I'll always root against corporations -- because that's the way I am. But not this one, this one's different."

10:39am - "But Jim G's the best studio head... really. But that's a little thing just to make me some money. This is from Toy Story, it got cut, Buzz and Woody's big love scene."

10:41am - Randy's singing "You've Got a Friend in Me."

10:42am - Song's done -- huge applause. "That's Randy Newman! We can't wait for you to get your hands on these new products, thank you SO MUCH for coming this morning. We look forward to a very innovative 2008. Thank you very much." Aaaaand we're done!